The Huduma Bill 2020; Impacts on Private Sector Enterprises

December 10, 2021 - 5 minutes read

Businesses and the Government will have a symbiotic relationship in the use of citizens’ data under changes to the law proposed in the Huduma Bill, 2020. 

The Bill is among those President Uhuru Kenyatta asked Parliament to expedite and conclude in his State of the Nation address. 

Despite an October 2021 judgment of the High Court declaring the roll out of Huduma Namba programme illegal for non-compliance with the Kenya Data Protection Act, President Uhuru has sought to fast track tabling of the Huduma Bill. The enactment of the Huduma Bill will institutionalize the reforms on the national identity ecosystem through the establishment of the National Integrated Identity Management System (NIIMS). The Huduma Bill will provide the legal framework for the operationalisation of NIIMS. 

NIIMS will serve as Kenya’s primary database for both foundational and functional data from which every other database with personal data of residents in Kenya, such as databases of voters, taxes, and social services, will be built.

The hurried efforts for the constitution of a centralised digital identity database are in the best interests of private sector enterprises. Principally, this will be achieved by improving the ease of conducting business within Kenya, especially by facilitating access to legal documents and licenses necessary for basic corporate regulatory compliance.

Prior to the formation of NIIMS, businesses operating in Kenya were required to make applications and payments to a wide plethora of government agencies. However, the development of NIIMS has sought to make the following consolidated services accessible from a single portal, effectively creating a one-stop-shop for accessing a range of government services:

  • Business Registration applications:
    • Application for Single Business Permit;
    • Search and registration of Business name;
    • Company registration for newly formed enterprises;
    • National Social Security Fund (NSSF) employer registration;
  • Tax applications: 
    • Application for tax compliance certificates;
    • KRA PIN Registration and PIN Update;
    • Tax Return filings and submissions;
  • Applications for business utilities:
    • Application for electricity connection;
    • Application for Water and Sewerage Connection;
    • Payment of water bills;
  • Issuance of Construction/ Building permits;
  • Payment of rent and rates for business premises; and 
  • Application for credit services for women entrepreneurs.

Businesses and Government agencies will profit from an increasingly symbiotic relationship through heightened utilisation of the NIIMS database. Business owners shall rely on their personal data stored on NIIMS to capitalise on prompt service provision from a single portal, while Government agencies will have at their disposal data from NIIMS to perform due diligence on and corroborate that the recipients of services sought are the genuine applicants. 

Furthermore, the Huduma Bill seeks to empower the Cabinet Secretary for the Ministry of Interior to link additional existing databases to NIIMS. The increased data points from the supplementary databases will potentially increase the scope of government services provided via the platform, further augmenting the utility of the database to businesses. 

In addition, Section 48 of the Huduma Bill permits sharing of foundational data of an individual with a private entity (i.e businesses), although only for the purpose of carrying out verification and with approval of the Principal Secretary for immigration services. Considering NIIMS has been developed to be the ‘single source of truth’ on a person’s identity, whether Kenyan citizens or foreign nationals residing in Kenya, businesses that lawfully access foundational data as per Section 48 are better placed to combat potential fraud emanating from both their employees and customers. 

NIIMS currently faces various legal uncertainties, encumbering the realisation of the full potential of the database. It remains to be determined whether the above perceived benefits to businesses will be manifested when the NIIMS database is deployed in its final form. 

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